Do COP summits pressure investors to divest from brown firms and invest in green firms?
This paper addresses this question using an event study that examines the impact of COP summits
on the returns of brown and green firms during both intra-COP and post-COP periods.
The findings reveal that COP events do not directly and significantly affect returns: while some
years exhibit an increase in green returns following COP summits, these effects are inconsistent
and not uniformly attributable to the events, suggesting that they do not drive investors
divestment from brown firms in favor of green alternatives. However, I observe market reactions,
particularly in the post-COP period, where green firms experienced an increase in their
returns. This might suggest that while COP events do not exert strong short-term influence,
they may still contribute indirectly to investors behavior by shaping long-term expectations
about sustainability.